Letter Opposing H.R. 976, the “Children’s Health Insurance Program Reauthorization Act of 2007”

 

September 26, 2007

TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:

The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses and organizations of every size, sector, and region, opposes H.R. 976, the “Children’s Health Insurance Program Reauthorization Act of 2007.” While we recognize the bill’s attempt to refocus SCHIP funds to be used by low-income children rather than adults, the Chamber opposes the significant expansion of the program, which is solely funded by raising the federal excise tax on tobacco.

To target a narrow sector of the U.S. economy with the aim of funding a broad-based entitlement program is grossly unfair and burdensome to American businesses and consumers, as well as for those regions of the United States whose economic well-being relies upon tobacco-based agricultural and industrial activities.

Moreover, an increase in the excise tax would reduce significantly the tobacco-related revenues that states receive under the Master Settlement Agreement and increasingly rely on to fund important programs. The Congressional Budget Office has also estimated that a federal excise tax increase would result in reduced payroll and income taxes. Additionally, a sharp increase in the tobacco tax could provide further incentive for illegal activities such as cigarette smuggling and counterfeiting.

Despite our objections to H.R. 976, the Chamber strongly supports reauthorizing SCHIP for currently eligible, uninsured and low-income children. Maximizing enrollment for these eligible children should be the principle aim of legislation reauthorizing SCHIP. We also support market-based reforms to ensure employers can continue to provide affordable health insurance to their employees and their families.

Sincerely,
R. Bruce Josten